Will China’s new 5 year plan reform its stainless industry?

The new five year plan promises moderate growth and reforms of the stainless industry which currently suffers from massive over capacity.

About the author

Joanne McIntyre is the Editor in Chief of Stainless Steel World magazine, and Conference Coordinator for the Duplex Seminar & Summit.

Last week the National People's Congress adopted China’s new five-year plan for the economy, aiming for 6.5-7% growth a year by 2020. Many of the measures announced by China's Premier Li Keqiang were aimed at cutting high debt, streamlining state-owned enterprises, and reforming financial markets, the BBC reported. This will inevitably include a shake-up for the country’s ailing steel industry.

China’s economy is beset by slower growth and market volatility. At his annual press conference after announcing the new plan, Mr Li stressed the importance of reforms to economic vitality. He also acknowledged there would be job losses as state-owned enterprises are reformed, particularly in the steel and coal industries, but said there would be no mass redundancies. The Economist remained sceptical in its reports, suggesting that the government would struggle to meet its targets without providing more stimulus to the national economy.

China's economy experienced its slowest rate of growth for 26 years in 2015, and its stainless steel industry continues to suffer from massive production over-capacity. Sever under-utilization of installed capacity has led to reduced economic efficiency for many enterprises.

I recently spoke to Professor Song, Head of the Stainless Steel & CRA Research Department at the China Iron & Steel Research Institute about China’s stainless steel market. He explained that it’s not all bad news: two hotspots are the civil nuclear and LNG industries.
“Material consumption within the nuclear power generation industry is massive,” he explained, while also pointing out the construction of stainless steel tanks for the LNG industry is a growing market.

Professor Song will give an in-depth plenary presentation on the development of Chinese duplex stainless steel in recent years and its current status at Duplex World Seminar & Summit, which takes place 12 & 13 October 2016 in Düsseldorf, Germany. He will be available to speak to delegates and visitors and provide valuable insights into the Chinese market. Read the full Seminar Program, or visit the Duplex World website for further information.